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Obama’s Measures for Middle Class

President Obama on Monday unveiled a package of modest initiatives intended to help the middle class.Credit
Doug Mills/The New York Times

WASHINGTON — President Obama vowed on Monday to “reverse the overall erosion in middle class security” as he stepped up his efforts to reconnect with Americans suffering from a weak economy and high unemployment.

Previewing a theme that is sure to dominate his State of the Union address this week, Mr. Obama unveiled a package of modest initiatives intended to help families pay for child care, save for retirement, pay off student loans and care for elderly parents.

“None of these steps alone will solve all of the problems facing the middle class,” Mr. Obama said, appearing alongside Vice President Joseph R. Biden Jr., who leads the task force that produced the proposals. “But hopefully some of these steps will re-establish some of the security that has slipped away in recent years. Because in the end, that’s how Joe and I measure progress — not how the markets are doing, but how the American people are doing.”

Addressing advisers who developed the plans, Mr. Obama tried to frame them as part of his efforts to build what he calls “a new foundation” for the American economy and took credit for creating or saving two million jobs since taking office through his stimulus spending and tax cut program. But he acknowledged that seven million jobs had been lost, which he called “an epidemic that demands our relentless and sustained response.”

He noted that the House had passed a $154 billion jobs bill and that the Senate was working on one, but he did not tip his hand on how much additional spending he would support to increase job creation efforts. Aides over the weekend would not say whether he would be more explicit in the State of the Union address to the nation on Wednesday night.

By focusing on what Mr. Biden called “the sandwich generation” — struggling families squeezed between sending their children to college and caring for elderly parents — Mr. Obama hopes to use his speech to demonstrate that he understands the economic pain of ordinary Americans. He noted Monday that the middle class was struggling even before the latest recession.

“Unfortunately, the middle class has been under assault for a long time,” the president said. “Too many Americans have known their own painful recessions long before any economist declared a recession.”

Mr. Biden rejected criticism that the proposals Mr. Obama was unveiling were relatively small-bore compared with the vast and sweeping measures he pushed during his first year in office. “They’re big-deal things if you’re just able to give some respite for a husband and wife, both working, to give a little bit of help,” Mr. Biden said.

The State of the Union address is still being written, but one senior official, describing it on the condition of anonymity, said its main themes would include “creating good jobs, addressing the deficit, helping the middle class and changing Washington.”

With his poll numbers down and Democrats fearing disaster in this year’s midterm elections, Mr. Obama is at a particularly rocky point in his presidency and has been shifting his rhetoric lately to adopt a more populist tone. He heads into his first formal State of the Union speech in a radically reshaped political climate from even one week ago.

His top domestic priority, a health care overhaul, is in jeopardy after the Republican victory in last week’s Massachusetts Senate race — a setback that White House advisers interpret as a reflection of Americans’ deep anger and frustration over high unemployment and Wall Street bailouts.

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One advantage of the president’s proposals is that they might appeal to people who are struggling financially without looking like the kind of broad expansion of the federal government that is making many Americans uneasy. They also would add little to the federal deficit at a time when Mr. Obama is pledging to reduce it.

For example, the president is calling on Congress to nearly double the child care tax credit for families earning less than $85,000 — a proposal that, if adopted, would lower by $900 the taxes such families owe to the government. But the credit would not be refundable, meaning that families would not get cash payments if they owe no income taxes.

Another of the president’s proposals, a cap on federal loan payments for recent college graduates at 10 percent of income above a basic living allowance, would cost taxpayers roughly $1 billion. The expanded financing to help families care for elderly relatives would cost $102.5 million — a pittance in a federal budget in which programs are often measured in tens if not hundreds of billions of dollars. And the automatic paycheck deduction program would simply be a way to encourage workers to save and would include tax credits to help companies with administrative costs.

Such programs are, notably, much less far-reaching than Mr. Obama’s expansive first-year agenda of passing an economic recovery package, bailing out the auto industry, overhauling the health care system, passing energy legislation and imposing tough restrictions on banks. That agenda has left him vulnerable to criticism that he is using the government to remake every aspect of American society.

Instead, the White House wants to use Wednesday’s address to explain how initiatives like the health care overhaul fit into his broader plan for job creation and the economy. On Sunday, as senior administration officials fanned out on the television talk shows, David Axelrod, Mr. Obama’s senior adviser, insisted that the health care bill was not dead. But he did suggest that the administration was now more focused on changing insurance practices than on a broad expansion of coverage to the uninsured.

“There are so many elements of this — tax breaks for small business, extending the life of Medicare, more assistance for seniors with their prescription drugs, a cap on out-of-pocket expenses, help for people with pre-existing conditions — that are too important to walk away from,” Mr. Axelrod said on the ABC program “This Week.”

With House and Senate leaders trying to figure out how to proceed legislatively, Mr. Axelrod also issued a warning to Democrats who were reconsidering their support for the health care measure.

“As a political matter, the foolish thing to do would be for anybody else who supported this to walk away from it,” he said. “The underlying elements of it are popular and important, and people will never know what’s in that bill until we pass it, the president signs it and they have a whole new range of protections they never had before.”

How Mr. Obama will address health care in the State of the Union speech, though, remains an open question. Officials on Capitol Hill and at the White House said their talks on how to proceed with the legislation might not be resolved by Wednesday. This could put Mr. Obama in the awkward position of talking about a measure that is on shaky ground.